Bluefly’s new CEO adds two more e-commerce heavyweights

By Stefany ZarobanAssociate Director of Research

The web-only retailer, which recently brought back its former CEO as chief merchant, adds two more e-commerce veterans to its executive roster. And it’s begun inviting other merchants to sell on Bluefly.com as the company strives to return to profitability

Neel Grover

Web-only fashion retailer Bluefly Inc. is rebuilding its executive team, stacking the top ranks with e-commerce veterans from some of the largest e-commerce players in the Top 500 Guide.

Sharon French, formerly the senior vice president of digital technology at Ralph Lauren, will take over in two weeks as the chief operating officer of Bluefly. Tony Barnes, the director of software engineering at Dell Inc., starts next week as chief technology officer. These hires follow another major announcement in February, when Bluefly brought back its former CEO Melissa Payner to head up its merchandising strategy.

The new appointments are part of a larger effort by Bluefly’s new owner Clearlake Capital Group and CEO Neel Grover to build a more technology-focused company that can become profitable. “At a high level, on the business side, Bluefly used to be a fashion company selling on the Internet,” Grover tells Internet Retailer. “Now we’re trying to make it an Internet business that sells fashion.”

A key initiative is a new online marketplace strategy that Bluefly quietly rolled out late last year. Previously, Bluefly took in nearly all products it sold on its site into its own inventory. The retailer will continue to warehouse apparel and accessory items, Grover says, but it’s also now allowing brands to sell to consumers on Bluefly.com and drop ship purchases directly from their own warehouses. Around 500 brands are selling on Bluefly.com now, and that number is likely to grow, Grover says.

Similar to such online marketplaces as those operated by eBay Inc. and Amazon.com Inc. (as well as Buy.com, now Rakuten Shopping, where Grover previously was CEO), Bluefly takes a cut of each sale on its site. Bluefly declined to disclose its commission rate. The marketplace model can be a higher-margin business than the traditional e-commerce model of buying a product, warehousing it and then selling it to consumers, Grover says.

“It’s a way to leverage your traffic to bring on more traffic,” Grover says. “We work on creating the best user experience as possible on Bluefly.com, but the marketplace expands our buying base quite a bit, as opposed to us buying hundreds of millions of dollars in new product.”

Bluefly’s core business continues to be selling a wide assortment of heavily discounted fashion items to consumers on Bluefly.com and the company’s flash-sales site, BelleAndClive.com. But Grover expects its online marketplace to represent a larger part of its business going forward.

Prior to taking over as CEO in June 2013, Grover spent around 10 years running the large online marketplace Buy.com, now called Rakuten.com Shopping. Over the course of his tenure, Buy.com evolved from an e-commerce site selling primarily discounted consumer electronics to an online shopping portal where other merchants can sell as well. Japan-based Rakuten acquired Buy.com in 2010 and made it a pure marketplace, like eBay.com or the Rakuten Ichiba online shopping mall in Japan.

Clearlake bought Bluefly in May 2013 at a time when the retailer was struggling financially. The company reported a $24.9 million net loss in 2012 and has not turned a profit since 2008. Grover says the retailer cut those losses by 50% in 2013.